Ottawa is returning to Tripoli and bringing the unfrozen billions of the Gadhafi regime.

In moves to encourage a return to normalcy in Libya, Canada has sent diplomats back to the capital and is preparing to transfer $2.2-billion in assets to the transitional government. But neither Ottawa nor NATO indicated when their military mission in that country will end.

The release of the assets, frozen under UN sanctions in February, is likely to help with Libya’s transition, as the former rebels now in government seek to pay for their administration and basic services across the country.

Foreign Affairs Minister John Baird said the United Nations sanctions committee allowed the assets to be released. He did not say precisely when they will be handed over.

“These funds will help the Libyan people in the short and the medium term,” he said. “Whether it’s helping to pay for police officers or teachers, restoring electricity or water, or helping to ensure hospitals have what they need to operate, this money will help the new government of Libya get back on its feet.”

Other countries, including Britain and the United States, have released small portions of frozen Libyan state assets with UN approval. It appears Canada will release most of the funds it froze in February – but the Foreign Affairs Department refused to say if all will be released.

Canada has also sent diplomats to Tripoli to prepare to reopen the Canadian embassy – following similar moves by Britain, France and the United States. And Canada will send a larger diplomatic corps to Libya to expand commercial services as Canadian companies rush to resume or start business in the oil-rich nation. The government refused to confirm reports that Canadian soldiers are in Tripoli to secure the embassy.

The moves to re-establish a diplomatic mission and release funds were welcomed by Libya’s new ambassador, Abubaker Karmos. Libya’s National Transitional Council had placed the release of Gadhafi-regime funds at the top of its requests to Ottawa for months.

The Opposition NDP applauded the moves, but said that the Canadian government should also be offering expertise in areas like democratic governance and health care. “The question now, once you open the embassy, is what are you going to do,” NDP foreign affairs critic Paul Dewar said.

It remains unclear when Canada and NATO allies will wrap up the military mission in Libya. NATO airstrikes continue to pound pro-Gadhafi forces in their handful of strongholds, but an official was coy about the duration of the mission, which has the stated aim of protecting civilians.

NATO and the Canadian missions are scheduled to end by Sept. 27. NATO’s spokesman, Oana Lungescu, said no decision has been made on whether to extend them, though the alliance is “determined to get the job done for as long as it takes but no longer than it takes.”

Mr. Baird did not say if the Canadian military mission – made up of six CF-18 fighters, surveillance and refuelling aircraft, and a warship with crew – will be extended. CTV News, however, reported Tuesday night that the mission would be extended by three months. Opposition critics said the government has not approached them about passing a new parliamentary resolution to give Commons approval for extending the mission.

Mr. Dewar said his party is convinced that the mission should not be extended because there is no longer a justification for a NATO military intervention to protect civilians against the Gadhafi regime. “Now’s the time to pivot to helping Libya with Libyan-led rebuilding,” he said.